Jeff McElfresh, president of AT&T's Technology and Operations division, said the carrier is planning a new round of layoffs, according to a memo obtained by Motherboard.
"To win in this new world, we must continue to lower costs and keep getting faster, leaner, and more agile," McElfresh reportedly told employees in the memo. "This includes reductions in our organization, and others across the company, which will begin later this month and take place over several months."
AT&T Inc. (NYSE: T) confirmed to Light Reading that the company is preparing to conduct a round of layoffs but said the effort would only impact a "very small" and unspecified number of the company's workforce. Further, the company said that technology improvements are driving "higher efficiencies" and there are some areas where demand for its "legacy" services continues to decline, which is why it's adjusting its workforce.
Added AT&T in a statement: "We are hiring to meet the needs of the growth areas of our business. In fact, we hired more than 20,000 new employees last year and more than 17,000 the year before. In cases where we do have to adjust our workforce, we take steps to lessen the effect on employees."
Because the memo was written by McElfresh, the layoffs may well be affecting AT&T's networks business. McElfresh, a 21-year veteran at AT&T, was named as the carrier's new president of technology and operations in August of 2018, giving him responsibility for the operator's mobile 5G rollout. McElfresh replaced Melissa Arnoldi in the role. (See Jeff McElfresh Is New Face of 5G at AT&T.)
In his role McElfresh oversees AT&T executives like Andre Fuetsch, who is AT&T's CTO and head of AT&T Labs, and Igal Elbaz, SVP for wireless technology (who reports to Fuetsch).
The news follows AT&T's push into software-defined networking and automation. Such technologies promise to potentially replace network operations employees with software.
Indeed, networking software and equipment vendor Huawei Technologies Co. Ltd last year predicted that up to 90% of network operations jobs could disappear in the next three to five years as software automation gathers momentum in the telecom sector. Moreover, in a Light Reading operator poll last year, fully 31.3% of survey respondents said that "reducing headcount" was a principal reason for automating network operations. (See Huawei Can Help Cut 90% of Networks Operations Jobs, Says Senior Exec and Automation Is About Job Cuts – LR Poll.)
AT&T's latest round of layoffs is part of a much bigger trend among telcos across the industry. For example, AT&T's overall workforce fell by nearly 11,000 during the first nine months of 2018 amid reports of cutbacks at US call centers and following the loss of around 27,500 jobs in the previous two years. And Verizon cut a total of 3,100 jobs from its overall workforce during the first nine months of 2018, after shedding more than 22,000 roles in 2016 and 2017. (See AT&T, Time Warner Shed 11K Workers in First 9 Months of 2018.)
In October, Verizon Communications Inc. (NYSE: VZ) offered 44,000 employees a buyout deal as part of a four-year, $10 billion cost-cutting scheme, and subsequently said that roughly 10,000 employees accepted that offer. Verizon counted 152,300 workers on its books at the end of September.
— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading